Singapore cuts 2003 growth forecast to 0.5%-2.5%

Singapore yesterday cut its official 2003 economic growth forecast to 0.5%–2.5% from 2%–5%, citing the impact of the deadly Severe Acute Respiratory Syndrome (SARS) virus. 

“SARS will significantly impact our economy. Our previous estimate of 2% to 5% GDP (gross domestic product) growth for 2003 is no longer realistic,” the Finance Ministry said in statement announcing the revised forecast. 

“Exactly how severe the impact of SARS will be is not yet clear. It will depend on how quickly we can control the disease in Singapore, as well as the course of the SARS outbreak in the region and beyond,” it added. 

To help businesses cope with the fall-out as tourism plunges and shoppers stay home, the government has announced a package of emergency economic measures including some tax rebates amounting to S$230mil. 

“It is a focused effort to provide immediate relief for the most directly and adversely hit sectors, namely the tourism and transport sectors. It is not intended as a general stimulus package for the whole economy,” the ministry said. 

The city-state’s tourism, retail and hospitality sectors have been badly affected by the SARS outbreak, but the government said it believed the trade-dependent economy was unlikely to fall back into recession. 

The first official indication of the scale of damage caused to the tourism sector by SARS was revealed on Tuesday when the tourism board said visitor arrivals had slumped 56% in the first week of April from a year ago. 

The relief measures for tourism-related industries include additional property tax rebates for commercial properties, higher property tax rebates for gazetted tourist hotels, and a 50% reduction in foreign workers levy for unskilled labour employed by gazetted tourist hotels. 

The government said the tax savings for owners of commercial properties would amount to S$56mil. 

Other measures included a bridging loan programme for tourism-related small- and medium-sized enterprises. 

The government also hopes the transport sector will benefit from diesel tax rebates for taxis, a 50% cut in port charges for cruise ships and relief measures for the aviation industry worth S$45mil which would run from May 1 to Dec 31. 

There will be an additional 30% rebate on aircraft landing fees and an extra 10% rental rebate for all tenants at Changi and Seletar airports, including the Changi airfreight centres. – Reuters  

  • Another perspective from The Straits Times, a partner of Asia News Network. 

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